October 06, 2006

Save the planet with Joseph Stiglitz

Lawrence MacDonald, of the Global Development Center, reports:
Nobel laureate Joseph Stiglitz urged at a CGD event that U.S. trade partners ask the WTO for authority to impose countervailing duties on exports of U.S. steel and other energy-intensive products that benefit unfairly from Washington’s refusal to join the Kyoto Protocol limiting carbon and other greenhouse gasses.

There is a precedent for such duties, Stiglitz said, because Washington previously obtained a World Trade Organization ruling in support of a U.S. ban on the import of shrimp caught in Thailand using nets that killed endangered species of turtles.
Stiglitz concluded:
If you can impose a trade sanction to save a turtle, you can impose a trade sanction to save the planet.
Jonathan Dingel argues that the proposed WTO policy would encourage pushing for trade barriers to counteract all sorts of real and imagined "unfair benefits" and "hidden subsidies." I see two other problems with Stiglitz's argument. First, many Kyoto signatory countries are failing to comply with the protocol. Spain is further from its Kyoto target than the U.S. is from its suggested target. The WTO would have to set ad-hoc countervailing duties for each individual country depending on how much they comply with the Kyoto protocol. Second, the proposed trade sanctions would not "save the planet." Even strict Kyoto compliance would have a minuscule effect on climate.

Ivar Giaever, who won the physics Nobel prize, once said that "Nobel laureates are like the rest of the world — some are smart, some are average and some are dumb."

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